Although timber prices fell in the fourth quarter of last year, timber market surveys show that the price of firewood remains relatively high.
In the timber market review, forestry expert Heiki Hepner said that the peak in market price levels has passed, and prices for nearly all types of wood have fallen. For example, the price of pine and aspen varieties fell by five to seven percent in the fourth quarter of 2022 compared to the preceding quarter. At the same time, the price of birch wood and logs increased by three to four percent in the fourth quarter.
The overall price of firewood is affected by changes in the price of varieties. In this case, too, the peak occurred last autumn, when three cubic meters of mixed firewood cost €80 per cubic meter. In March, the price of the same product has been cut in half. The catch is that the fall in market prices has not been fully reflected in retail firewood prices.
"One of the reasons for this is that the producers of firewood products purchased more expensive material in the winter, from which the retail products are now made, and every business owner wants to be able to sell their product without incurring additional costs," Hepner explained.
Kristjan Paaps, sales manager of Kroonipuu, also said that the pricing of firewood starts with the price of the raw material that is bought in, and that on a year-on-year view, the price of firewood is falling.
"Raw material is one-third of the cost, production is one-third of the cost and drying is one-third of the cost; these three components add up to the price of dry firewood," Paaps said.
In the fall of 2021, poplar straw could be purchased for €40 per cubic meter.
Grey alder, Hepner said, is still the least expensive burning wood, despite having doubled in price.
Paaps said that the grey alder costs €68 per cubic meter as a wet grey alder, while the black alder costs €73. One cubic meter of wet birch, however, costs €98. Drying adds approximately €30 to each price.
"The main difference is the price of the raw material, because black and grey alder are now primarily separated, and they also differ in calorific value, making black alder slightly more expensive. In our region, birch is the market price for pulpwood and paper wood, and its raw material is much more expensive, with its pricing being nearly a third higher," Paaps explains.
It is difficult to predict the future price of firewood. Variations in the cost of raw materials are affected, for instance, by the amount of pellets that Denmark and the Netherlands purchase from Estonia.
"When there is a high demand for material but a limited supply, the price rises. That is what happened in Ukraine at the start of the war, when Russian gas supplies were cut off and there was a lot of uncertainty. This was partially offset by increased wood consumption, which meant that the price of firewood rose more than it would have otherwise," Hepner explained.
Paaps went on to say that for the time being, loggers and forest harvesters have put the felling of firewood and cheaper material on hold.
"They saw this exorbitant price last November, and today's reality also does not attract business. Perhaps we will end up in a situation where demand increases and prices rise, but it could also be the other way around, where demand for firewood, wood chips, and pellets falls and prices fall."
Editor: Kristina Kersa